A quasi-contract (or implied in law contract or constructive contract) is
a fictional contract recognised by a court. The notion of a quasi-contract can
be traced to Roman law and is still a concept used in some modern legal
systems. A valid contract must contain certain essential elements, such as offer
and acceptance, capacity to contract, consideration and free consent.
sometimes the law implies a promise imposing obligations on one party and
conferring right in favour of the other even when there is no offer, no
acceptance, no genuine consent, lawful consideration, etc. and in fact neither
agreement nor promise. Such cases are not contracts in the strict sense, but the
Court recognises them as relations resembling those of contracts and enforces
them as if they were contracts. Hence the term Quasi contracts (i.e. resembling
Even in the absence of a contract, certain social relationships give rise to
certain specific obligations to be performed by certain persons. These are known
as quasi contracts as they create same obligations as in the case of regular
contract. Quasi contracts are based on principles of equity, justice and good
conscience. A quasi or constructive contract rests upon the maxims, No man must
grow rich out of another persons loss.
In quasi-contract, there would be no offer and acceptance so there shall be
contractual relations amid the partners. It is created by means of the virtue of
law and is known as a quasi-contract. Quasi contract Sections 68 to 72 of the
Indian Contract Act 1872 provide for 5 kinds of quasi-contractual obligations,
- Supply of necessities [section 68]
- Payment by interested persons [section 69]
- Liability to pay for non-gratuitous acts [section 70]
- Finder of goods [section 71]
- A mistake of coercion [section 72]
Essentials of Quasi-Contract:
- It is enforced by law. It is not formed by contract.
- It is a right in personam.
- The individual who incurs expenses is entitled to receive money (unjust
- It is raised through a legal fiction.
Sections 68 to 72 deals with certain relations resembling those created by
It incorporates those obligations which are known as Quasi-Contracts
or Constructive Contracts
under English law. It covers cases were the obligation
to pay arises neither on the basis of a contract nor a tort, but because a
person has obtained an unjust benefit at the cost of another. The principle of
natural justice and equity' is thus the determining factor in such obligations.
The quasi contractual obligations are based on the principle that law as well as
justice should try to prevent unjust enrichment, i.e. enrichment of one person
at the cost of another [Lord Mansfield in Moses v. Macferlan
(1760) 2 Burr
1005] or to prevent a man from retaining the money of, or some benefit derived
from, another which it is against conscience that he should keep.
These relations are called as quasi contractual obligations. In India it is also
called as certain relation resembling those created by contracts
Salient features of quasi contracts:
- In the first place, such a right is always a right to money and
generally, though not always, to a liquidated sum of money.
- Secondly, it does not arise from any agreement of the parties concerned,
but is imposed by the law.
- Thirdly, it is a right which is available not against the entire world,
but against a particular person or persons only, so that in this respect it
resembles a contractual right.
Cases Deemed as Quasi Contracts
1. Supply of Necessaries (Section 68)
Minor's agreement being void ab initio, he cannot therefore, as a general rule,
be asked to pay for the services rendered or goods supplied to him. Section 68,
however, permits reimbursement to a person, who supplies necessaries to a
minor or a lunatic person. For reimbursement no personal action can lie against
the minor, etc., but reimbursement is permitted from the property or estate of
such incapable person.
What are Necessaries?
Necessaries does not mean bare necessities of life (e.g. food, cloth, shelter,
etc.), but means such things as may be necessary to maintain a person according
to his conditions in life' (i.e. his status and requirements). Articles of mere
luxury are always excluded, though luxurious articles of utility are in some
cases allowed. The infant must not have already a sufficient supply of the
The following have been held to be necessaries:
- Supply of racing cycle for an infant apprentice.
- Debt incurred for performing the funeral rites of minor's father.
- House given to a minor on rent for living and continuing his studies.
- Wedding presents for a bride of minor.
- Money advanced for defending criminal proceedings.
But where a minor is engaged in trade, contracts entered into by him for trading
purposes are not for necessaries and are not binding on him. It may be noted
that the necessaries may be supplied to someone whom the minor is legally bound
to support, such as his wife and children.
2. Payment by an Interested Person (Section 69)
A person who is interested in the payment of money, which another is bound by
law pay, and who therefore, pays it, is entitled to be reimbursed by the other.
For example, where a party had agreed to purchase certain mills, he was allowed
to recover from the seller the amount of already overdue municipal taxes paid by
him in order to save the property from being sold in execution.
The conditions of liability under Section 69 are:
- The plaintiff should be interested in making the payment. It is not
necessary that he should have a legal proprietary interest in the property
in respect of which the payment is made.
- The plaintiff himself should not be bound to pay. He should only be
interested in making the payment in order to protect his own interest.
- The defendant should be under legal compulsion to pay.
- The plaintiff should have made the payment to another person and not to
3. Liability to Pay for Non-Gratuitous ActThree conditions must be satisfied before Section 70 can be invoked:
- A person should lawfully do something for another person or deliver
something to him.
- In doing the said thing or delivering the said thing he must not intend
to act gratuitously.
- The other person for whom something is done or to whom something is
delivered must enjoy the benefit thereof.
- A, a tradesman, leaves goods at B's house by mistake. B treats goods as
his own. He is bound to pay A for them.
- A save B's property from fire. A is not entitled to compensation from B
if the circumstances show that he intended to act gratuitously.
Similarly, where a coolie takes the luggage at the railway station without being
asked by the passenger or a shoe-shiner starts shining shoes of the passenger
without being asked to do so, and if the passenger does not object to that, then
he is bound to pay reasonably for the same as the work was not intended to be
In cases falling under Section 70, the person doing something for another cannot
sue for specific performance, nor ask for damages for breach, as there is no
contract between the parties. All that Section 70 provides for is that if the
services or goods are accepted a liability to pay arises.
The person for whom the act is done is not bound to pay unless he had the choice
to reject the services. It is only where a person voluntarily accepts the thing
or enjoys the work done that the liability under Section 70 arises. Further, it
is necessary that services should have been rendered without any request.
However, reasonable compensation may be recovered for services rendered at
request. Services rendered to a person incompetent to contract (e.g. minor) at
the time cannot be made the basis of an action under this section. Section 70
applies even if there is a non-compliance of constitutional requirement of
contracting with the State (viz. Art. 299 of the Constitution). Thus, in State
of W. B. v. B.K. Mondal & Sons
(AIR 1962 SC 779), the plaintiff made certain
constructions at the request of an officer of State.
The State accepted the work
but refused to pay pleading that there was no valid contract. The Court held in
favour of the plaintiff. Similarly, in another case, the corporation tried to
escape liability on the ground that the contract was not made in accordance with
Bombay Municipal Corporation Act. The Corporation was held liable under Section
4. Finder of Goods
A person, who finds goods belonging to another and takes them into his custody,
is subject to the same responsibility as a bailee (Section 71).
5. Mistake or Coercion
A person to whom money has been paid, or anything delivered, by mistake or under
coercion, must repay or return it (Section 72).
- A and B jointly owe Rs. 100 to C. A alone pays the amount to C, and B,
not knowing this fact, pays Rs. 100 over again to C. C is bound to repay the
amount to B.
- A railway company refuses to deliver up certain goods to the consignee,
except upon the payment of an illegal charge for carriage. The consignee
pays the sum charged in order to obtain the goods. He is entitled to recover
so much of the charge as was illegally excessive.
In Sales Tax Officer v. Kanhaiya Lai Sara
(AIR 1959 SC 135), it has been
held that the money paid under mistake is recoverable whether the mistake is of
fact or of law. And the term mistake' has been used without any limitation
under Section 72. In this case, a certain amount of sales tax was paid by a firm
under the U.R Sales Tax laws on its forward transactions. Subsequently to the
payment the Allahabad High Court ruled the levy of sales tax on such
transactions to be ultra vires. The firm sought to recover back the tax money.
The Supreme Court allowed it.
The court observed:
Payment by mistake
in Section 72 must refer to a payment which was not
legally due and which could not have been enforced; the mistake' is thinking
that the money paid was due when, in fact, it was not due.
In Tilok Chand Moti Chand v. Commr. of Sales Tax
(AIR 1970 SC 898) a firm
paid sales tax in respect of sales to consumers outside the State of Bombay and
which were, therefore, not liable to any sales tax. The firm had itself
collected the tax money from its customers. The amount was ordered to be
refunded to the customers. The firm paid back the amount, however, the Act under
which the recovery was made from the firm was declared to be ultra vires.
The firm sought to recover back the money as having been paid under either
mistake of law or coercion. The Supreme Court held that the firm did not suffer
from any mistake under Section 72. The court, however, held that the payment
was made under coercion and would have been recoverable under Section 72.
A quasi-contract was distinct from a contract implied in fact:
- Contract implied in fact. A person's assent to be bound by an agreement
can be expressed or implied. In the latter case, assuming the requisite
formalities for a valid contract are met, there is a perfectly normal
contract. The only distinction between a contract arising by express
agreement between two people and a contract implied in fact is that the
latter was recognized by a court drawing inferences from facts proved at
trial. When the plaintiff sued on either sort of contract, she was suing in
the law of contract in respect of a consensually assumed obligation and her
remedy for the defendant's breach was damages.
- Quasi-contract. In contrast, quasi contract refers to situations in
which a defendant is bound as if there were a contract. When the plaintiff
sued on such a contract' by bringing an action of indebitatus assumpsit,
she was not enforcing some consensually assumed obligation, but rather an
obligation imposed by law.
The quasi-contracts differ from that of a contract which is generally expressed
as they contain each term in words whereas, in the latter, the terms come into
existence through the conduct of the individuals. The express contracts are
approved by individuals as a matter of law both share equal interests with equal
consequences though the conditions are specified expressly whereas in the case
of quasi contracts the law enforces obligations considering the conduct of the
individuals in order to prevent undue advantage to one individual at the cost of
Similarities between Quasi Contracts and Contracts
The result of the contract, as well as the quasi-contract, is similar to that of
contracts. In case of the claim for damages are concerned both of them are very
similar to that of contracts because Quasi contract Section 73 of the Indian
Contract Act, 1872 if offers remedies for the violation of quasi-contracts as
provided for the breach of express contracts in many sections of the Indian
Contract Act, 1872. Remedies are also available under the quasi-contract under
the Indian contract act, 1872.
Quasi-contracts are based on the principle of Nemo debet locupletari ex aliena
, which implies that no man should grow rich out of another person's
loss. Consequently, liability in the case of quasi contractual responsibilities
is based on the principle of unjust enrichment
. Quasi contract basically means
that no individual must get unjustly enriched at the cost of another
individual's loss. That means no individual must gain anything unjustly when his
gaining such a thing might mean a loss for another individual.